Roche to start production of Herceptin in Russia

R-Farm, one of Russia’s largest drugs’ distributors, has reached an agreement with Roche (ROG: SIX) on the production and sales of its blockbuster cancer drug Herceptin (trastuzumab) - which generated sales of 5.43 billion Swiss francs ($6.4 billion) last year for the Swiss drug major - at P-Pharm’s Ortat plant, which is located in the city of Kostroma.

As part of the agreement, Roche has provided P-Pharm with non-exclusive rights for the Herceptin brand for a period of three years. According to the companies, at the initial stage the plant will focus on the packaging of the drug. Investment in the project is estimated at 100 million rubles ($3.5 million), but production volume has not yet been announced.

The agreement could be highly beneficial for Roche, taking into account the status of R-Farm as one of the largest suppliers of medicines for state needs (along with Pharmstandard, Farmimeks and some others) and, in particular to the Russian Ministry of Health. This may help Roche to significantly increase sales of Herceptin in Russia.

According to Russian market research firm Pharmexpert, the value of the oncology segment of public purchases of drugs in Russia in 2010 amounted to $4-$5 billion, equivalent to 25%-28% of the total Russian pharmaceutical market. Decision Resources forecasts that the breast cancer drug market in Russia alone will reach $226 million by 2014. Herceptin is approved for the treatment of breast cancer as well as other forms of cancer such as stomach and gastric.